LME base metal prices are trading down today after yesterday’s rebound due to persisting bearish sentiment owing to poor China manufacturing PMI and weak oil prices. Today’s Eurozone producer prices added further strength to the bears. The Eurozone PPI fell further than expected in October, slipped 0.4%, compared to a 0.2% rise in September, underlying the subdued inflation pressures. Eurozone inflation has been declining for years now, which is raising the speculation that the European Central Bank will be forced to start a sovereign quantitative easing program next year. ECB policy meeting on December 4 would contain hints on this. Regarding the outcome from the meeting, the base metal complex would attract some buyers from the current lows. As the general sentiment is bearish, we may experience a short term advance in prices with a possible momentum of short covering. Volatility has significantly increased in the LME index as we are coming closer to the year end. Investors should take short term positions by using stop loss points. For the producers the importance of hedging has become very solid, which need to be applied in every trade. For questions and comments please mail to [email protected] Twitter: @acmetalsmarket
Posted on: Tue, 02 Dec 2014 12:22:40 +0000
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